Kenya could reduce its high public debt distress by allocating part of proceeds from the National Infrastructure Fund (NIF) to retire some expensive debt.
According to the World Bank, Kenya’s public debt remains elevated on the back of growing domestic borrowing which increased to account for 56.2% of total debt as at the end of the 2025/26 fiscal year. In the year, public debt accounted for 69.9% of gross domestic product.
“This trend has deepened sovereign-bank linkages, increased refinancing risks, raised interest costs, and may constrain the availability of credit to the private sector. Kenya remains at high risk of debt distress, underscoring the need for a sustained fiscal consolidation and prudent debt…